Explanatory Statement
Appropriation Act (No. 3) 2003-04, Section 10 – Reduction of Appropriations from Prior Years Upon Request
The instrument to which this explanatory statement relates
This explanatory statement relates to an instrument (the instrument) entitled “Determination to Reduce Appropriation Upon Request”, dated 11 April 2005 and numbered 3 of 2004-2005.
The legislative authority under which the instrument is made
Section 10 of Appropriation Act (No. 3) 2003-04 enables the Finance Minister to make a determination reducing departmental appropriations for prior years from 1999‑2000, up to and including Appropriation Act (No. 1) 2003-04, upon receipt of a written request from the Minister responsible or, in the case of an agency in the Finance portfolio, the Chief Executive.
The provision was included in Appropriation Act (No. 3) 2003-04 to enable excess departmental appropriation items for prior years, which do not automatically lapse, to be extinguished. Excess appropriation may arise where, for example:
- An amount is reclassified and appropriated again under another kind of appropriation;
- Efficiency savings result in a programme costing less than expected; and
- A programme under Government policy is abolished prior to the appropriation being expensed.
A determination issued by the Finance Minister pursuant to section 10 of Appropriation Act (No. 3) 2003-04 cannot reduce an appropriation item by more than the lesser of the amount requested by the responsible Minister or Chief Executive (as appropriate), and the balance of the appropriation item remaining in the Consolidated Revenue Fund.
Purpose of the instrument
The instrument directs that departmental outputs appropriation for the Department of Health and Ageing in Appropriation Act (No. 1) 2003-04 be reduced by $2,500,000.
Background
On 4 May 2004, the Minister for Health and Ageing, the Hon Tony Abbott, wrote to the Minister for Finance and Administration seeking a reduction of the Department of Health and Ageing’s departmental outputs appropriation in Appropriation Act (No.1) 2003-04 by $2,500,000. The appropriation was for costs related to the establishment of the Trans-Tasman Therapeutic Products Agency. However, because of a delay in the implementation of that Agency, that funding became excess to the Department of Health and Ageing’s requirements.
Notes on the instrument
The instrument provides that the appropriation item in column 1 for the Department of Health and Ageing be reduced in response to a request made by the Minister in column 4 by the amount listed in column 6.